Endnotes

¹ADB operations refer to “subregional” instead of “cross-border” projects. The World Bank defines a subregional project more restrictively as having more than two countries involved directly in the project; a two-country project is defined as a bilateral cross-border project. The latter case can be considered as having subregional impacts on the condition that bilateral borders are part of economic corridors. The working definition of a “subregional” project at ADB accommodates any projects that can be described by one or more of the following: (i) involving two or more countries but excluding bilateral projects; (ii) single country project but linking subregional transport corridors; and (iii) those included in Regional Cooperation Strategies and Programs.

²A clear case of divergence between aggregate net benefits and the sum of national net benefits is evidenced by an example in Roy (2000) of the high-speed Paris–Brussels–Cologne–Amsterdam–London rail project. He points out that conventional evaluation from the national perspective omitted cross-border benefits accruing to non-resident users traveling in each national section and led to underestimation of aggregate net benefits by 27%.

³This issue is not unique to cross-border projects. However, the larger scale of cross-border projects requires, for example, the addition of various corridor investments in infrastructure facilities to road investments, and correspondingly the inclusion of benefits from these investments in the overall analysis.

⁴In this regard, donors that support regional cooperation are justified in earmarking some portion of their financial resources for cross-border projects. ADB has a “set-aside” portion of about 10% in its concessional funds (called the Asian Development Fund).

⁵For example, Singh and Mitra (2006), in attempting to assess the poverty impact of GMS regional integration initiatives, selected Saravan Province in Lao PDR as a “non-corridor” comparator as opposed to the other corridor-influenced provinces. They made a practical compromise by resorting to a diagnostic approach over a rigorous statistical treatment of causality in the face of “multiple treatments” ongoing simultaneously in the GMS and in the absence of baseline data in most cases.

⁶See the previous footnote. Multilateral development banks like ADB also play the role of an investment catalyst or a finance mobilizer as their participation in a project reassures other co-financiers including those in the private sector.

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